Global auto industry struggles to recover (international perspective)

　　Core reading

　　The automobile industry is characterized by a long industrial chain and a highly globalized division of labor. Under the impact of the epidemic, the automobile industry in many countries temporarily stopped production and production. Recently, as the epidemic situation in some countries has slowed, auto companies have actively promoted the resumption of production and production. Many governments have also actively formulated relief policies to stimulate the recovery of the industry from the production and sales ends of the automobile, push the automobile industry out of the trough, and help the industry recover And transformation.

　　The latest data shows that global auto companies have received at least US$155 billion in financial support in the past three months, including US$44 billion in bonds and US$111 billion in loans. Among them, 33 car companies and parts companies in the United States received $50 billion in loans and issued $16 billion in bonds; more than 20 car companies, suppliers and car rental companies in Europe received $47 billion in loans and issued $19 billion in bonds; Asian auto companies such as Toyota, Subaru, and Hyundai received $13 billion in loans and issued $9.4 billion in bonds.

　　Analysts pointed out that the global auto industry is expected to gradually recover within the year given that auto companies issue bonds, layoffs and other self-help measures, and that countries will successively introduce auto industry economic stimulus policies. After the epidemic, people may be more inclined to travel by car, which also helps the automotive industry gradually recover.

Production and sales were severely affected by the epidemic

　　Due to the large number of employees in the automotive industry, long industrial chain, and strict division of labor, the epidemic has a huge impact on the global automotive industry chain, and the automotive industry has suffered a serious crisis in both terminals of production and consumption.

　　According to the statistics of the European Automobile Manufacturers Association, as of June, the EU-wide automobile production loss has exceeded 2.446 million units, of which Germany exceeded 616,000 units.

　　In the first quarter of this year, the German auto giant Volkswagen delivered only 2 million vehicles worldwide, down 23% year-on-year, revenue was 55.1 billion euros, down 8.3% year-on-year, and pre-tax profit fell sharply by 3.9 billion euros, a decrease of 81.4%. According to statistics from the German Federal Motor Transport Agency, 168,000 new vehicles were registered in May this year, a decrease of about 50% compared to the previous month. The confidence of the German automobile industry in the same month also fell to its lowest level since 1991.

　　According to the "Japan Economic News" report, affected by the global spread of the new crown pneumonia epidemic, 8 Japanese automakers such as Toyota, Nissan, Honda, and Suzuki's global production fell by 60.5% year-on-year in April, which is further compared with the 26% drop in March. The expansion exceeded the largest decline during the international financial crisis.

　　Data show that the output of light vehicles in the United States fell by 99.47% year-on-year in April. Only GM, Mercedes-Benz and Hyundai produced vehicles in the United States in the month, but the output was less than 5,000.

Governments and businesses take multiple measures

　　Recently, as the epidemic situation in some countries and regions has slowed down, countries have begun to actively promote the resumption of production, including the automotive industry, and large auto companies have also taken measures to lay off employees and relax restrictions on car loans. The bailout measures implemented by many governments to restart the economy have provided a boost to the auto industry's recovery.

　　According to statistics, the number of layoffs of global auto companies is expected to exceed 100,000 in 2020, and the layoffs are mainly in North America and Europe.

　　Toyota CEO Nao Toyoda said at the annual shareholder meeting that Toyota is relaxing the loan repayment period and providing used car rental services, seeking loans and credit lines from banks, and will continue to invest in research and development. Volkswagen Group CEO Diss previously stated that due to the epidemic, Volkswagen must further significantly reduce R&D expenditure, investment and fixed costs. At present, Volkswagen has applied for a short-term work system for 80,000 employees.

　　German auto parts giant ZF recently announced that it will cut 15,000 jobs globally in the next five years. French automaker Renault announced that it will lay off approximately 15,000 people worldwide in the next three years, and plans to reduce its fixed costs of 2 billion euros to reduce production capacity in response to the decline in performance. Johnson Matthey, the world's largest manufacturer of diesel engine catalysts, announced on June 11 that it plans to lay off about 2,500 people, saying that although automakers have begun to resume production, "the road to recovery is still long."

　　Starting in May, automobile factories in major automobile manufacturing countries such as Germany, Spain, France, Czech Republic, and Slovakia have resumed production. The 750 billion euro bailout plan issued by the European Union in May has 20 billion euros to promote the sale of clean energy vehicles, and plans to install 2 million electric vehicle charging piles by 2025. The German government also plans to provide 2 billion euros in subsidies for vehicle and auto parts companies for technological innovation, and will invest 2.5 billion euros in expanding the charging network and battery research and development.

　　The German government has recently approved a package of economic revitalization of 130 billion euros to help the German economy recover from the epidemic crisis as soon as possible. Among them, the support funds for the automobile industry reached 5 billion euros. Prior to this, the auto industry support plan issued by France amounted to 8 billion euros.

　　As the US states reopened, US automakers restarted most of their assembly plants at the end of May. Data show that auto retail in May was stronger than expected, prompting automakers to speed up production. Jim Farley, chief operating officer of Ford Motor Co., said on June 11 that it expects its American auto assembly plant to return to its pre-outbreak level in early July. "A car has an average of more than 10,000 parts and components, which requires extensive cooperation between suppliers and trading partners to promote safe and reliable restart of car production", John Burza, CEO of the United States "Automotive Innovation Alliance" Pull said.

The automotive industry will usher in an opportunity for transformation

　　The latest report from Bank of America predicts that global car sales will not return to pre-epidemic levels until 2022 or 2023. According to the latest forecast from Ward Consulting, sales of light vehicles in the United States will drop to about 13.4 million units in 2020, far below the forecast of close to 17 million units before the outbreak. The agency also expects that by 2023, U.S. auto sales will return to pre-epidemic levels.

　　Affected by the epidemic, online sales are increasingly accepted by car consumers. The New York Times commented that in the past, consumers usually used the Internet to browse car information and went to dealers to buy cars on the spot. As the epidemic spreads, this situation is changing. The online used car sales platform Vroom has been listed on the NASDAQ recently, which has aroused widespread market attention. Through the Vroom platform, customers can complete transactions without visiting the store in person, and the platform arranges for customers to pick up or deliver goods. Since March, the platform's e-commerce sales have set a record. Analysts believe that this highlights that automotive retailers are increasingly turning to e-commerce.

　　"Real-time experience is a trend in the automotive industry now and in the future," the CBT Auto World website commented that although some social isolation measures have been lifted, auto dealers may still need to limit the number of customers to ensure everyone's safety. At present, many dealer websites use chatbots powered by artificial intelligence to handle after-hours consultations and transfer some customers to online agents.

　　The “Car Kingdom” chain of 325 dealers across the United States released a report saying that online sales in March and April saw substantial growth. The company's CEO Mike Jackson believes: "Even if the regulations on social isolation measures are relaxed, online car sales will continue to grow, which is a turning point and a strategic change."

　　John Berzala said that despite the ongoing restart of the automotive industry, there are still high uncertainties in the production and sales of automobiles in terms of supply chain challenges, consumer confidence and overall economic signals.

　　The popularity of electric vehicle sales is also one of the few bright spots in the auto market during the epidemic. In May, sales of electric cars in Germany increased by 20%, and data from the European Automobile Manufacturers Association showed that sales of pure electric vehicles in Europe exceeded 130,000 in the first quarter of this year, an increase of 58% from the same period last year.

　　Eric-Marc Huitma, Director General of the European Automobile Manufacturers Association, called: "We need to act quickly on the charging infrastructure to give consumers the confidence to buy electric vehicles and ensure that they replace old cars in an environmentally friendly way. Promote the transformation of the automotive industry."

　　(Reporter Washington, Berlin, June 14th)

　　Our reporter in the United States Wu Lejun Our reporter in Germany Li Qiang